A $600000 bond was retired at 98 when the carrying value of the bond was $590000. The entry to record the retirement would include a
A) gain on bond redemption of $10000.
B) loss on bond redemption of $10000.
C) loss on bond redemption of $2000.
D) gain on bond redemption of $2000.

Question

Quizplus · Accepted Answer

The bond was retired for $588,000 ($600,000 x 98%), which is $2,000 less than its carrying value of $590,000, resulting in a gain on bond redemption of $2,000.

A $600000 Bond Was Retired at 98 When the Carrying